Rate of exchange drops drastically in India

Rate of exchange drops in India

Rate of exchange drops drastically as three suspects caught with old currency notes in India

Mumbai police’s crime branch unit have detained three suspects who were found with 63 lakhs of old currency notes. The detained suspects include tattoo artist, Amit Jahangir and Gaurishankar Mistry and jewellers Rajesh Jain.

The suspects were rounded up based on the tip-off from the public. The police picked them up from Mumbai Central area during an intensive operation which involved several policemen. During a search operation, the police found 63.2 lakh of old currency notes in 1000 rupee notes.

The most interesting part of this case was the commission rate at which these three suspects were exchanging the old currency notes. After several hours of interrogation, they told the police that they were exchanging it at 1% of the total amount.

It has to be noted that after the Indian Prime Minister Narendra Modi's demonetisation policy, the country’s currency rates were high up to 60%.

"We are shocked at the rate at which the current currency rates have dropped drastically. Last year, from 8th November to 31st December, the rates were as high as 60 percent. At the moment the rate is 1%. This is due to the huge amount of new currency notes circulating in the market. It is very shocking that there is no shortage of new currency notes. In fact, the currency is in excess,” a senior crime branch officer told India Today.

According to RBI policy, old currency notes can be exchanged by NRIs till 31st March.

Meanwhile, the special crime branch unit has informed the Department of Income Tax who are also carrying out parallel investigations regarding this matter.

In other news

Last month, Australian foreign reserves were reported to have hit very low records, falling sharply from around 76.1 billion to 68.6 billion. Despite this discouraging report, which was released on Tuesday this week, the Australian Dollar-Euro Exchange Rate has not been affected in any way.

Investors across Europe, who had feared that the worst would happen, were instead surprised by the Reserve Bank of Australia’s less dovish tone after this month’s policy meeting. The resilience of recent growth data and domestic trade is seen as the major factor that has improved the outlook for the domestic economy.

This development encouraged Australian policymakers to maintain a neutral view when it comes to commenting on monetary policy. This in turn naturally boosted the demand for the Australian dollar in spite of the discouraging report about the foreign reserve data.

Meanwhile, confidence in the Euro currency was low due to the rising tension involving the deadlock between Greece and its ever-growing list of creditors. The annual review of the Greek economy carried out by the International Monetary Fund (IMF) lead to fresh concern that Greece will be expected to put it in place strict measures in exchange for continued support. While the International Monetary Fund advocated for debt relief, the sign of a further split of opinions on the Executive Board was a major determining factor on the appeal of the single currency.